Air Transportation

Russia’s airport crackdown looks like shakedown

27 Jul 2011

A judicial investigation into Moscow's Domodedovo airport is fuelling suspicions that the Kremlin is again expropriating private property, to the benefit of friendly oligarchs. Security concerns and the airport's murky ownership look like excuses for a Russianstyle takeover.

BAA faces rock bottom Stansted airport selloff

20 Jul 2011

The UK airports group, no stranger to bad timing, would only be able to sell Stansted at a big discount to its 1.32 bln pound regulated value. The secondstring London airport is too reliant on Ryanair and on cashstrapped holidaymakers. No wonder BAA is playing for time.

Air Lease investors put wallets in pilot’s hands

19 Apr 2011

A firm with leasing pioneer Steven UdvarHazy at the controls can't be ignored, and investors jumped on board at a heavy premium to peers. But its $2.4 bln IPO came with barely half a year of figures and the CEO's Rolodex as the main asset. The market has its head in the clouds.

Surely, U.S. plane ticket prices can’t go up more?

7 Mar 2011

Don't call us Shirley but yes, they can. Cheap seats are up 14 pct in the past year, but airfares had fallen on average 40 pct in real terms over three decades thanks in large part to deregulation. With oil prices again threatening airline profits, seat prices are taking flight.

Boeing highlights pension rollercoaster

27 Jan 2011

Higher pension expenses knocked the aircraft maker's earnings outlook. That's partly because the Fed's low interest rates make retirement obligations look bigger for many industrial firms. When the economy and rates pick up, Boeing and its peer group should get a double boost.

Moscow bombing hits out at worldwide interests

24 Jan 2011

Russian risks have acquired a dangerous new dimension with the explosions at Moscow's Domodedovo airport. Russia's economy has shaken off past violent incidents, but this attack is serious in human, political and economic terms because it raises global fears.

EasyJet is a poor omen for airline results

20 Jan 2011

Travel disruption, lower nonticket revenue and high fuel prices trashed fullyear profit estimates for the UK lowcost carrier. Rivals face similar pressures, and EasyJet could make a comeback. But investors are unlikely to give its rookie management much benefit of the doubt.

Heathrow chaos could be eased by demand management

21 Dec 2010

Investment to boost capacity is, of course, part of the solution. But inducements for those passengers and airlines that have less need to travel and extra payments from those that do should also be pushed more actively, says Hugo Dixon who spent Monday at the airport.

Snow chaos impact more reputational than financial

21 Dec 2010

If the spring's volcanic ash cloud is any guide, the aviation industry can swallow the financial cost of Europe's snow disruption. Hence the muted reaction of airline share prices. But Heathrow's operator, Ferrovialowned BAA, has suffered a hardertoquantify reputational hit.

London slides, again, because of Heathrow, again

20 Dec 2010

The snow and ice in Europe is extreme but the situation at the region's most important airport is still shocking. The logistical failings are bad, the customer service woeful even for premium travellers. London must get a grip of its gateway to the global business community.

Whole airline industry shakes in Rolls turbulence

2 Dec 2010

The aeroengine maker's reputational fug may deepen as new details of the Qantas engine explosion emerge. Though the nearterm financial damage to Rolls is unchanged, the industrywide finger pointing serves only to beggar civil aviation neighbours.

Kayak floats, or sinks, behind U.S. antitrust boat

18 Nov 2010

The $50 mln IPO of the fastgrowing travel website looks promising. There s one big hitch Google s purchase of ITA Software means the giant wants to dominate online travel search. A bet on Kayak is a wager that Uncle Sam will halt Google s acquisition which isn t far fetched.

Billionaire Buffett bows to poor man’s jet service

4 Nov 2010

Berkshire s NetJets division, which sells private jet timeshares, has acquired Marquis, the firm that leases air time to a more costconscious clientele. Combining the two under one operation makes sense, and could earn NetJets boss David Sokol more accolades from Omaha.

BA shows it’s safe to be an airline again

29 Oct 2010

The UK airline swung to a profit thanks to rising ticket prices. The impact of its joint venture with American Airlines is kicking in, and the merger with Iberia is on track. But economic recovery is still fragile, and the good news may already be priced in the shares.

Ferrovial reshuffle signals end of BAA nightmare

25 Oct 2010

Giving up majority ownership of the indebted UK airport group will remove 15 bln euros of debt from the Spanish group's balance sheet. Though cosmetic, the move confirms that the illfated deal is no longer a drag on Ferrovial. Indeed, the BAA stake may actually have some value.

U.S. airlines can soar higher with reverse thrust

21 Oct 2010

Southwest s bumper profit caps a heady week for the industry. The glum economic backdrop makes the rebound even more impressive. Rising fuel prices remain a threat. But U.S. carriers can keep momentum by resisting the selfdestructive surge in plane orders happening in Europe.

Southwest’s $1.4 bln AirTran deal pays for itself

27 Sep 2010

The dominant discount airline s takeover gives it valuable gates in Atlanta and several Northeast cities. While AirTran poses operational risk and comes at a 69 pct premium, the promised synergies are worth about $2.8 bln. Even if some savings disappear, the deal stacks up.

European airlines risk sabotaging own recovery

19 Aug 2010

Most of Europe's legacy carriers are adding capacity despite the stillfragile market. The growth will almost certainly reduce ticket prices, just when they are rising again. More caution is warranted from this most cyclical of industries but is unlikely.

Airline revenue synergies far from pie in the sky

3 May 2010

United and Continental reckon their merger can add almost $1 billion a year to the top line. Investors in other industries would scoff at such optimism. But for airlines much of the revenue juice is actually akin to cutting costs and there's precedent for making it happen.

EU should stand up to airlines on state aid

30 Apr 2010

The case for giving handouts to airlines after this month's volcanic disruption is weak. Shareholders, future passengers and insurers not taxpayers should accept the risks associated with air travel. But the EU could also revisit the rules for dealing with acts of God.